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Unformatted text preview: Ethics and
Corporate Responsibility QUESTION OF THE DAY
Recently GOOGLE seemed willing to take down material and remove user who do not conform to standards in other countries. This pertains mostly to China where state censors decide what’s acceptable.
What’s the ethical thing for Google to do?
Why would Google want to let others decide what is acceptable “It is truly enough said that
a corporation has no
conscience; but a
conscientious men is a
corporation with a
Henry David Thoreau
Henry David Thoreau
5-3 A FEW ETHICAL QUESTIONS
FEW Is it OK for employees to slack off 20% of the work day (Google study 9/2007)?
In today’s economy should only “high performers” receive annual pay increases? (average employees receive $0)
Is it acceptable to take company office supplies home for personal use? How much is OK? – a pencil or two or a ream of paper? Ethics
Ethics Ethics • The system of rules that governs the ordering of values 5-5 It’s a Big Issue
It’s As a result of corporate scandals • Barely more than half of American respondents say they trust business
• Less than onefourth say they trust CEOs in general
• Only 31% say they trust their own CEO Over onethird of U.S. adults say they have observed unethical conduct at work It’s a Big Issue
About 20% have seen • Abuse or intimidation of employees
• Lying to employees, customers, vendors, or the public
• Situations where employees placed their own needs ahead of company interests The top justification given for unethical behavior is “pressure to meet unrealistic goals and deadlines” It’s a Personal Issue
It’s Most of us believe we are ethical but most have unconscious biases that favor ourselves and their own group 5-8 It’s a Personal Issue
It’s Managers often: •
• Hire people who are like them
Think they are immune to conflicts of interest
Take more credit than they deserve
Blame others when they deserve some blame themselves 5-9 Ethics
Ethics The aim of ethics is to identify both the rules that should govern people’s behavior and the “goods” that are worth seeking
• Situation, problem, or opportunity in which an individual must choose among several actions that must be evaluated as morally right or wrong
• The moral principles and standards that guide behavior in the world of business Ethical Systems
Philosophy Universalism Utilitarianism Caux
Principles Egoism Relativism Virtue
Which ethical system bases ethical behavior on the opinions and behaviors of relevant other people?
B.Utilitarianism C.Relativism D.Virtue ethics 5-12 Business Ethics
Business A recent survey of 700 employees in various jobs showed • 39% said their supervisor sometimes didn’t keep promises
• 24% said their supervisor had invaded their privacy
• 23% said their supervisor covered up mistakes by blaming someone else The Ethics Environment
The SarbanesOxley Act • An act passed into law by Congress in 2002 to establish strict accounting and reporting rules in order to make senior managers more accountable and to improve and maintain investor confidence. Ethical Climate • In an organization refers to the processes by which decisions are evaluated and made on the basis of right and wrong Danger Signs • In organizations, maintaining consistent ethical behavior by all employees isan ongoing challenge Question
What act passed into law by Congress in 2002 established strict accounting and reporting rules? A.Wagner Act
D.GAAP Act 5-15 Danger Signs
3. 4. 5. 6.
7. Excessive emphasis on shortterm revenues over longerterm considerations.
Failure to establish a written code of ethics.
A desire for simple, “quick fix” solutions to ethical problems.
An unwillingness to take an ethical stand that may impose financial costs.
Consideration of ethics solely as a legal issue or a public relations tool
Lack of clear procedures for handling ethical problems.
Responding to the demands of shareholders at the expense of other constituencies 5-16 The Ethics Environment
The Corporate ethical standards • An ethical leader is both a moral person and a moral manager who influences others to behave ethically
• Ethics codes address subjects such as employee conduct, community and environment, shareholders, customers, suppliers and contractors, political activity, and technology
• Ethics programs include ethics codes articulating expectations regarding ethics
• Compliancebased ethics programs prevent, detect, and punish legal violations Today’s Manager
Today’s Ethical leader • One who is both a moral person and a moral manager influencing others to behave ethically. 5-18 Ethics Programs
Ethics Compliancebased ethics programs • Company mechanisms typically designed by corporate counsel to prevent, detect, and punish legal violations. Integritybased ethics programs • Company mechanisms designed to instill in people a personal responsibility for ethical behavior 5-19 Ethical Decision Making
Making ethical decisions takes: Moral awareness • realizing the issue has ethical implications Moral judgment • knowing what actions are morally defensible Moral character • the strength and persistence to act in accordance with your ethics despite the challenges
5-20 Ethical Decision Making
Courage Why might employees lack courage in ethical issues? • A belief that the company would not take corrective action
• A fear that management would retaliate against the employee for speaking up
• Doubt that the employee’s report would be kept confidential The Business Costs of Ethical
Failure Figure 5.2 5-23 Ethical Dilemma
Ethical A situation that arises when all alternative choices or behaviors have been deemed undesirable because of potentially negative ethical consequences, making it difficult to distinguish right from wrong Global Corporate Social
Responsibility and Performance
Responsibility Corporate Social Responsibility
Corporate Transcendent education • An education with five higher goals that balance selfinterest with responsibility to others
• Empathy, generativity, mutuality, civil aspiration, intolerance of ineffective humanity 5-26 Business Costs of Ethical
Failure Corporate Social Responsibility
Corporate Economic responsibilities • To produce goods and services that society wants at a price that perpetuates the business and satisfies its obligations to investors. Legal responsibilities • To obey local, state, federal, and relevant international laws 5-28 Corporate Social Responsibility
Corporate Corporate social responsibility is the obligation toward society assumed by business
Economic responsibilities are to produce goods and services that society wants as a price that perpetuates the business and satisfies it obligations to investors
Legal responsibilities are to obey local, state, federal, and relevant international laws.
Ethical responsibilities include meeting other societal expectations not written as law
Philanthropic responsibilities are additional behaviors and activities that society finds desirable and that the values of the business support Ecocentric Management
Ecocentric Ecocentric management • Goal is the creation of sustainable economic development and improvement of quality of life worldwide for all organizational stakeholders. 5-30 Ecocentric Management
Ecocentric Sustainable growth • Economic growth and development that meet present needs without harming the needs of future generations Lifecycle analysis (LCA) • A process of analyzing all inputs and outputs, though the entire “cradletograve” life of a product, to determine total environmental impact
5-31 The Ethical Organization
The Three Pillars of an Ethical Organization Exhibit 5.9 ...
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This note was uploaded on 01/13/2012 for the course 620 300 taught by Professor Gordon during the Fall '10 term at Rutgers.
- Fall '10